The Hindu Business Line : Chola MS General Insurance wipes off accumulated losses

Chennai May 29 April 2007 is a landmark month in the history of Cholamandalam MS General Insurance Company, because that is the month the company cleaned up all the red in its balance sheet.

The company earned premium income of Rs 315 crore in 2006-07 and made a net profit of Rs 13 crore. In April, it made a net profit of Rs 5 crore.

With this, it has wiped off the entire accumulated losses of Rs 16 crore, Mr M. Anandan, Managing Director, told Business Line.

He expects at least 60 per cent growth in premium income in the current year.

Associate co

An interesting feature of the company's operation is the fact that a large part of its business is brought in by its associate company, Cholamandalam MS Risk Services Ltd. While this company achieved a turnover of Rs 2.7 crore last year, a number of its clients - many of them Japanese companies - became customers of the insurance company.

Chola Risk Services advises clients on how to mitigate risks, which apart from aiding avoid the headache of dealing with disasters, also helps reduce insurance premium.

Serving clients

Speaking to newspersons on Monday, Mr N.V. Subba Rao, Head, Chola MS Risk, gave the example of a chain of hotels which benefited by the company's services.

Chola Risk did thermography tests, which use infra red-based equipment to identify vulnerable spots in an electrical circuit where fire could occur, and identified 22 hot spots. Upon this, the hotel management had similar tests done in all of its hotels.

Chola Risk has also worked with a Japanese car manufacturer in India to analyse the possibilities of accidents involving its car carriers. The car company became a customer of Cholamandalam Insurance.

Mr Anandan said that the insurance company got over 50 clients through Chola Risk.

In view of the growing demand for the risk services and the synergies with the insurance business, Chola Risk is in the process of obtaining expertise from its collaborator, InterRisk Research (part of Mitsui Sumitomo), for a broader range of services.

For instance, the company wants to be a certifier of `green buildings.'